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- 10 December 2012
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I'm expecting the peso to be down with a 6 in front of it, possibly even a 5 depending how deep the income recession takes us.
I'm expecting the devaluation to be greater than most seem to be thinking at present. Looking at the overall circumstances, a bit over 80 US cents still sounds more like a top than a bottom despite the recent falls.
the context of why the deficit is blowing out has now become relevant.
There's a big difference between a one-off problem versus an ongoing structural one.
Eat too much on Christmas Day = not really a problem. Doing it every day is a very different situation however which in due course leads to obesity and associated problems.
Same principle with finance. I see no problem with running the occasional deficit due to one-off problems. Eg 40 years ago Darwin was flattened by a cyclone and there was also the partial collapse of the Tasman Bridge in Hobart. Two significant disasters within days of each other. Commonsense says borrow money if needed to deal with the situation. Same with more recent things like the Queensland floods a few years ago etc. It's OK to borrow if you've got a fundamentally sound position and can repay the debt from ongoing income. It's very, very different however if you're borrowing in order to fund routine expenditure as now seems to be the case.
The trouble with politicians of all persuasions is that they seem to expect the good times to last forever. We have a boom in whatever industry and that generates both taxation revenue and broader benefits such as reduced unemployment etc. Governments always fail to save for a rainy day and we're then faced with a financial crisis once the boom inevitably ends.
It's economics 101 really. I won't claim to know what the next boom will be or when it will occur. But I do know that it will in due course end. They always do. Only politicians seem unable to grasp this basic reality.
Before they hit the jackpost with North Sea oil Norway mainly relied on fishing and shipping for their income.Now they have an 800 billion sovereign wealth fund with a population of a little over five million.They were not going to let the vast majority of oil profits go to the private sector.
In Australia both parties tend to pork barrel for the next election.I heard John Hewson say that the Howard/Costello middle class welfare handouts cost between thirty to forty billion.That was when John Howard said that what better could you do than give the money to the people.
And I think that the Rudd/Gillard governments wanted to introduce extra expenditure ,maybe to make it hard for the incoming government.
With three year election cycles and no consensus about the future between antagonistic poliltical parties not much will change in Australia.
As was said....the culture is not right.
God knows how many hare brained "nation building" schemes they would have come up with.
I'm sure we could come up with a pretty long list of potentially worthwhile projects and no doubt we'd disagree with some of them. But anything of ongoing use, which benefits the nation's productivity and has a 50+ year lifespan looks a lot better an idea to me than spending it on new TV's and so on.
There's good spending and there's bad.
The Snowy scheme was commenced before most currently living Australians were born. For that matter, it was commenced before their parents were born in many cases and construction was completed a generation ago (1975).
It still has value today. It still generates peak power into NSW and Vic. It still provides irrigation water for agriculture. It still does exactly what it was supposed to do, and there's no reason why it shouldn't still be working long after you and I fall off our perch.
In contrast, can anyone point me to a real ongoing benefit of the $900 "Rudd money" handouts? Anything at all of ongoing value? I'd take a guess that well over 90% of what it bought has either been consumed, thrown out or forgotten about by now.
I'm not proposing that we necessarily build another Snowy-like scheme involving dams and tunnels (though that is possible in an engineering sense certainly) but if we're going to spend taxpayers' funds to generate economic activity then I'd very much rather it went into something of effectively permanent value instead of disappearing amidst general consumer spending on mostly imported goods.
I'm sure we could come up with a pretty long list of potentially worthwhile projects and no doubt we'd disagree with some of them. But anything of ongoing use, which benefits the nation's productivity and has a 50+ year lifespan looks a lot better an idea to me than spending it on new TV's and so on.
The $900 handouts were the quickest way to give the economy a consumer injection. They served their purpose.
Piers Akerman: PM Tony Abbott’s obstinance is protecting chief of staff Peta Credlin
THE SUNDAY TELEGRAPH - 28 December 2014
http://www.dailytelegraph.com.au/ne...167157731?nk=b48c34b742cfb95f7a3fad9430acac2b
...It is clear that Abbott has developed an almost unhealthy reliance on Credlin’s advice...
...there is a problem having a married couple such as Credlin, in the prime minister’s office, and her husband Brian Loughnane, as federal director of the Liberal Party...
...Mainstream Coalition supporters feel they have been deserted...
Logique
Piers Akerman: PM Tony Abbott’s obstinance is protecting chief of staff Peta Credlin
THE SUNDAY TELEGRAPH - 28 December 2014
http://www.dailytelegraph.com.au/new...3fad9430acac2b
...It is clear that Abbott has developed an almost unhealthy reliance on Credlin’s advice...
...there is a problem having a married couple such as Credlin, in the prime minister’s office, and her husband Brian Loughnane, as federal director of the Liberal Party...
...Mainstream Coalition supporters feel they have been deserted...
The sad part for me is that I (and 55% of the voting minions) have to involuntarily suffer the poor choices others made and the incomprehensible obsequious devotion of some to the lemon they bought.
Um, I can think of just one.There certainly seem to be a lot of rusted ons here.
Um, I can think of just one.
Well, no, apparently. Opinion polls tell us that we are actually dissatisfied with the status quo and unhappy with the belt-tightening that Tony Abbott and Joe Hockey would have us do.
Well, I look forward to your enlightening me as to the other rusted on Coalition supporters, noco fairly clearly being the obvious one.Yes, you would as you seem to have a condition of selective reading.
Well, I look forward to your enlightening me as to the other rusted on Coalition supporters, noco fairly clearly being the obvious one.
Yes, indeed I have voted Labor both federally and state. And I would again if they showed evidence of good policy and sound financial management.
So that's me off your list of rusted on voters. Who else are you asserting falls into that category?
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